Land Grabs = Water Grabs

By Crossed Crocodiles

Here are two noteworthy stories about water and water rights. In summary, growing food or commercial crops in one country to transfer to another country also constitutes a transfer of water from the first country to the second, usually a transfer of water from a poorer country to a richer country. Two scientists had diagrammed and analyzed global water transfers which increasingly benefit the already rich countries. Africa has been a popular target of land grabs that are also water grabs. The second article discusses how the World Bank, often using the IFC, is working to privatize water rights into the hands of a few large corporations. Those corporations are mostly concerned with maximising short term profits, with no interest in infrastructure, conservation or development.

IS THIS the face of future water conflicts? China, India and Saudi Arabia have lately leased vast tracts of land in sub-Saharan Africa at knockdown prices. Their primary aim is to grow food abroad using the water that African countries don't have the infrastructure to exploit. Doing so is cheaper and easier than using water resources back home. But it is a plan that could well backfire.

"There is no doubt that this is not just about land, this is about water," says Philip Woodhouse of the University of Manchester, UK.

Take Saudi Arabia, for instance. Between 2004 and 2009, it leased 376,000 hectares of land in Sudan to grow wheat and rice. At the same time the country cut back on wheat production on home soil, which is irrigated with water from aquifers that are no longer replenished - a finite resource.

Meanwhile, firms from China and India have leased hundreds of thousands of hectares of farmland in Ethiopia. Both China and India have well-developed irrigation systems, but Woodhouse says their further development - moving water from the water-rich south to northern China, for instance - is likely to be more costly than leasing land in Africa, making the land-grab a tempting option.

But why bother leasing land instead of simply importing food? Such imports are equivalent to importing "virtual water", since food production accounts for nearly 80 per cent of annual freshwater usage. A new study into how this virtual water moves around the world offers an explanation for the leasing strategy. Ignacio Rodriguez-Iturbe of Princeton University and Samir Suweis of the Swiss Federal Institute of Technology in Lausanne have built the first mathematical model of the global virtual water trade network, using the UN Food and Agricultural Organization's data on trade in barley, corn, rice, soya beans, wheat, beef, pork, and poultry in 2000. They combined this with a fine-grained hydrological model (Geophysical Research Letters, DOI: 10.1029/2011GL046837).

The model shows that a small number of countries have a large number of connections to other countries, offering them a steady and cheap supply of virtual water even if some connections are compromised by drought or political upheaval. A much larger number of countries have very few connections and so are vulnerable to market forces.

Most importantly, the model shows that about 80 per cent of the water flows over only about 4 per cent of the links, which Rodriguez-Iturbe calls the "rich club phenomenon". In total, the model shows that in 2000, there were 6033 links between 166 nations. Yet 5 per cent of worldwide water flow was channelled through just one link between two "rich club" members - the US and Japan.

The power of the rich club may yet increase. The model allows the team to forecast future scenarios - for example, how the network will change as droughts and spells of violent precipitation intensify due to climate change. Predictably, this will only intensify the monopoly, says Suweis. "The rich get richer."

China and India are not currently major players in the virtual water network on a per capita basis, and as the network evolves they could find themselves increasingly vulnerable to market forces and end up paying more for the food they import. Leasing land elsewhere is an attempt to secure their food and water supply in a changing world. But it could be a short-sighted move.

Last year, Paolo D'Odorico of the University of Virginia at Charlottesville showed that a rise in the virtual water trade makes societies less resilient to severe droughts (Geophysical Research Letters, DOI: 10.1029/2010GL043167). "[It] causes a disconnect between societies and the water they use," says D'Odorico. The net effect is that populations in nations that import water can grow without restraint since they are not limited by water scarcity at home.

Although this could be seen as a good thing, it will lead to greater exploitation of the world's fresh water. The unused supplies in some areas that are crucial in case of major droughts in other areas will dry up. "In case of major droughts we [will] have less resources available to cope with the water crisis," says D'Odorico.

In the end, then, the hunt for water that is driving emerging economies to rent African land to grow their crops could come back to haunt them.

Although the next story is not as specifically about African land and water, it has huge implications for Africa. Africa is a favorite target of water grabs.

Billions have been spent allowing corporations to profit from public water sources even though water privatization has been an epic failure in Latin America, Southeast Asia, North America, Africa and everywhere else it's been tried. But don't tell that to controversial loan-sharks at the World Bank. Last month, its private-sector funding arm International Finance Corporation (IFC) quietly dropped a cool 100 million euros ($139 million US) on Veolia Voda, the Eastern European subsidiary of Veolia, the world's largest private water corporation. Its latest target? Privatization of Eastern Europe's water resources.

"Veolia has made it clear that their business model is based on maximizing profits, not long-term investment," Joby Gelbspan, senior program coordinator for private-sector watchdog Corporate Accountability International, told AlterNet. "Both the World Bank and the transnational water companies like Veolia have clearly acknowledged they don't want to invest in the infrastructure necessary to improve water access in Eastern Europe. That's why this 100 million euro investment in Veolia Voda by the World Bank's private investment arm over the summer is so alarming. It's further evidence that the World Bank remains committed to water privatization, despite all evidence that this approach will not solve the world's water crisis."

All the evidence Veolia needs that water grabs are doomed exercises can be found in its birthplace of France, more popularly known as the heartland of water privatization. In June, the municipal administration of Paris reclaimed the City of Light's water services from both of its homegrown multinationals Veolia and Suez, after a torrent of controversy. That's just one of 40 re-municipilazations in France alone, which can be added to those in Africa, Asia, Latin America, North America and more in hopes of painting a not-so-pretty picture: Water privatization is ultimately both a horrific concept and a failed project.

"It's outrageous that the World Bank's IFC would continue to invest in corporate water privatizations when they are failing all over the world," Maude Barlow, chairwoman of Food and Water Watch and the author of Blue Covenant: The Global Water Crisis and the Fight for the Right to Water, told AlterNet. "A similar IFC investment in the Philippines is an unmitigated disaster. Local communities and their governments around the world are canceling their contracts with companies like Veolia because of cost overruns, worker layoffs and substandard service."

…The World Bank has learned nothing from these disasters and continues to be blinded by an outdated ideology that only the unregulated market will solve the world's problems …

But asking the World Bank to learn from disaster would be akin to annihilating its overall mission, which is to capitalize on disaster in the developing world in pursuit of profit. Its nasty history of economic and environmental shock therapy sessions have severely wounded more than one country …

…"In the past, the World Bank pushed privatization as the way to increase investment in basic infrastructure for water systems," said Gelbspan. "But since then bank officials have admitted that the transnational corporations don't want to invest in infrastructure, and instead want only to pare down operations and skim profits. The World Bank has lowered the bar, satisfied with so-called 'operational efficiency,' that cuts utility workforce, tightens up bill collections and shuts off people who can't pay."

That's been a recipe for failure and protest ……… the World Bank is simply spinning off its compromised philosophy to the IFC. So while the World Bank may be torn in its endorsement of water privatization, the IFC has no such reservations, in hopes of dodging the slings and arrows of public outcry, and perhaps legal liability.

"What's really scary," O'Callaghan added, "is that we are increasingly seeing the International Finance Corporation pick up where the Bank has left off in water privatization. The IFC is a Bank-sponsored institution whose goal is to promote the private sector, and because their financing also comes from the private sector, they can be more difficult to hold accountable. Worse yet, according to our 2000-2008 stats, 80 percent of IFC loans had gone to the four largest multinational water companies, further concentrating the global water industry."

…"Droughts and deserts are spreading in over 100 countries," Barlow said. "It is now clear that our world is running out of clean water, as the demand gallops ahead of supply. These water corporations, backed still by the World Bank, seek to take advantage of this crisis by taking more control over dwindling water supplies."

Which is another way of saying that, regardless of the refreshing trend toward re-municipalization, no one should expect the World Bank or its IFC untouchables to give up the privatization and deregulation ghost anytime soon. That means that every city, and citizen, is due for a day of reckoning of some sort, and should fight back against the bankrupt privatization paradigm with everything in its arsenal.

And Barlow adds, "The only path to a water-secure future is water conservation, source water protection, watershed restoration and the just and equitable sharing of the water resources of the planet. Water is a commons, a public trust and a human right and no one has the right to appropriate for profit when others are dying from lack of access."

I can only second these sentiments, and repeat: Water is a commons, a public trust and a human right and no one has the right to appropriate for profit when others are dying from lack of access. All of us in every community everywhere should be watching where our water is coming from, and stay involved in questions of water management in our home communities.